No one seems to have remembered – except Vlad Putin, of course – that the roughly 50,000 US troops and officials now based in Afghanistan are in large part at the mercy of Russia which controls their major supply and exit routes.

The two small South Island trusts, Mainland and Air Rescue Services, were both slammed in Internal Affairs audit reports released last week under the Official Information Act.

While Internal Affairs blacked out the numbers in the reports, it was clear both trusts were paying salaries well over $120,000 a year to their senior executives despite having only a handful of employees and pokies in just a few venues.

Trusts are meant to keep operating costs to an absolute minimum so they return the maximum amount of money to the community in grants.

Internal Affairs said Mainland chief executive Nick Kouloubrakis and directors were overpaid and a planned bonus for Kouloubrakis was “unjustified”. Honoraria to directors were “excessive”, with four directors and three members of a funds-distributing committee paid a total of $117,000 a year.

Kouloubrakis’ salary was “among the top CEO packages in New Zealand [in monetary terms] for gaming machine societies”, the audit said.

His pay was similar to that of chief executives of trusts with a $70 million turnover and 25 staff, yet Mainland had a $10m turnover, 10 venues, and only one fulltime employee and one part-time. Internal Affairs said he shouldn’t have earned more than $90,000.

Trust chairman Bob Davison said it had Kouloubrakis’ salary professionally reviewed and had been told it was appropriate.

Davison said he was “staggered” at criticism of directors’ fees as they hadn’t increased in six years. He pointed out that by returning 42 per cent of its income in grants, Mainland was one of the best-performing trusts around.

The Air Rescue Trust was told it could lose its licence if it didn’t cut managing director Barry Stean’s salary but chairman David Duns said employment law made it difficult. “We have problems either way.”

Internal Affairs’ report said Stean’s salary was “not reasonable and must be reduced to a more acceptable level . . . [it is] unacceptably high”. It quoted a report from financial adviser Mercer which recommended a salary between $81,000 and $122,000. Duns admitted Stean’s salary exceeded $122,000.

The action is supported by the Problem Gambling Foundation which has campaigned against wastefulness in the sector.

A revolutionary new method of encrypting confidential information has been patented by scientists at Lancaster University.
They have been inspired by their discoveries from human biology, which model how the heart and lungs coordinate their rhythms by passing information between each other.

A mathematical model based on the complex interaction between these organs has now been transferred to the world of modern communications.

This discovery could transform daily life which is reliant on secure electronic communications for everything from mobiles to sensor networks and the internet.

Every device, from your car key to online bank account, contains different identification codes enabling information to be transferred in confidence. But the race to outwit the hackers means there is a continual demand for better encryption methods.

Inspiration for the new method of encryption came from interdisciplinary research in the Physics Department (www.physics.lancs.ac.uk/research/nonlinear-and-biomedical-physics) by Dr Tomislav Stankovski, Professor Peter McClintock, and Professor Aneta Stefanovska, and the patent includes Dr Robert Young.

Professor McClintock commented that this is a significant discovery.

He said: “This promises an encryption scheme that is so nearly unbreakable that it will be equally unwelcome to internet criminals and official eavesdroppers.”

Professor Stefanovska emphasized the interdisciplinary aspect:

“As so often happens with important breakthroughs, this discovery was made right on the boundary between two different subjects – because we were applying physics to biology.”

Dr Stankovski said: “Here we offer a novel encryption scheme derived from biology, radically different from any earlier procedure. Inspired by the time-varying nature of the cardio-respiratory coupling functions recently discovered in humans, we propose a new encryption scheme that is highly resistant to conventional methods of attack.”

The advantage of this discovery is that it offers an infinite number of choices for the secret encryption key shared between the sender and receiver. This makes it virtually impossible for hackers and eavesdroppers to crack the code.

The new method is exceptionally resistant to interference from the random fluctuations or “noise” which affects all communications systems.

It can also transmit several different information streams simultaneously, enabling all the digital devices in the home, for example, to operate on one encryption key instead of dozens of different ones.

After a few months working on the forty-second floor at One New York Plaza, Serge came to the conclusion that the best thing they could do with Goldman’s high-frequency trading platform was to scrap it and build a new one from scratch. His bosses weren’t interested. “The business model of Goldman Sachs was, if there is an opportunity to make money right away, let’s do that,” he says.

“But if there was something long-term, they weren’t that interested.” Something would change in the stock market— an exchange would introduce a new, complicated rule, for instance— and that change would create an immediate opportunity to make money. “They’d want to do it immediately,” says Serge. “But if you think about it, it’s just patching the existing system constantly. The existing code base becomes an elephant that’s difficult to maintain.”

That is how he spent the vast majority of his two years at Goldman, patching the elephant. For their patching material he and the other Goldman programmers resorted, every day, to open source software—software developed by collectives of programmers and made freely available on the Internet.

The tools and components they used were not specifically designed for financial markets, but they could be adapted to repair Goldman’s plumbing.

He discovered, to his surprise, that Goldman had a one-way relationship with open source. They took huge amounts of free software off the Web, but they did not return it after he had modified it, even when his modifications were very slight and of general, rather than financial, use. “Once I took some open source components, repackaged them to come up with a component that was not even used at Goldman Sachs,” he says. “It was basically a way to make two computers look like one, so if one went down the other could jump in and perform the task.” He’d created a neat way for one computer to behave as the stand-in for another. He described the pleasure of his innovation this way: “It created something out of chaos. When you create something out of chaos, essentially , you reduce the entropy in the world.”

He went to his boss, a fellow named Adam Schlesinger, and asked if he could release it back into open source, as was his inclination. “He said it was now Goldman’s property,” recalls Serge. “He was quite tense.” Open source was an idea that depended on collaboration and sharing, and Serge had a long history of contributing to it. He didn’t fully understand how Goldman could think it was okay to benefit so greatly from the work of others and then behave so selfishly toward them.

“You don’t create intellectual property,” he said. “You create a program that does something.” But from then on, on instructions from Adam Schlesinger, he treated everything on Goldman Sachs’s servers, even if it had just been transferred there from open source, as Goldman Sachs’s property . (Later, at his trial, his lawyer flashed two pages of computer code: the original, with its open source license on top, and a replica, with the open source license stripped off and replaced by the Goldman Sachs license.)

The funny thing was that Serge actually liked Adam Schles-inger, and most of the other people he worked with at Goldman. He liked less the environment the firm created for them to work in.

“Everyone lived for the year-end number,” he said. “You get satisfied when the bonus is sizable and you get not satisfied when the number is not. Everything there is very possessive .”

It made no sense to him the way people were paid individually for achievements that were essentially collective achievements. “It was quite competitive. Everyone’s trying to show how good their individual contribution to the team is. Because the team doesn’t get the bonus, the individual does.”

More to the point, he felt that the environment Goldman created for its employees did not encourage good programming, because good programming required collaboration. “Essentially there was very minimal connections between people,” he says. “In telecom you usually have some synergies between people. Meetings when people exchange ideas. They aren’t under stress in the same way.

At Goldman it was always, ‘Some component is broken and we’re losing money because of it. Fix it now .’ ” The programmers assigned to fix the code sat in cubicles and hardly spoke to one another. “When two people wanted to talk they wouldn’t just do it out on the floor,” says Serge. “They would go to one of the offices around the floor and close the door. I never had that experience in telecom or academia.”